Last month, Asia was under the spotlight of global diplomacy, from the Association of Southeast Asian Nations (ASEAN) summits in Kuala Lumpur to the APEC meeting in the Republic of Korea. While the global focus was on the first China-US summit since US President Donald Trump won a second term — a meeting aimed at deescalating the tariff war — ASEAN quietly emerged as a winner amid the global geopolitical tension. Once again, the European Union, however, found itself caught between China-US competition.
This year’s ASEAN summits became an arena for such competition, but ASEAN carefully and successfully balanced its relationships with both powers. It strengthened economic ties with China to maintain a key market and source of imports, while simultaneously deepening cooperation with the United States to diversify its economic and security partnerships. This highlights ASEAN’s growing influence in a multipolar world.
Malaysian Prime Minister Anwar Ibrahim’s successful invitation of Trump to the summit was undoubtedly a major diplomatic victory for him personally, while also providing Trump with a prominent stage to advance his foreign policy goals. Seizing the opportunity, the US worked to advance its Indo-Pacific strategy aimed at containing China. The two sides signed a Joint Vision Statement, confirming US security commitments to ASEAN and deepening the comprehensive strategic partnership.
Trump’s brief schedule yielded substantial results. Malaysia and the US signed a trade and critical-minerals agreement, securing American access to Malaysia’s substantial rare earth reserves of 16.1 million metric tons. In a separate deal, Thailand committed $18.8 billion to purchase 80 fighter jets, a move accompanied by the establishment of a stable export mechanism for Thai nickel and cobalt to the US. Cambodia also signed a reciprocal trade agreement that eliminated tariffs on a wide range of US goods. Meanwhile, Vietnam pledged to expand imports of high-tech products from the US. This commitment is aimed at addressing America’s growing trade deficit with Vietnam, which reached $123 billion last year.
The US may wish to secure better market access for American goods and pressure ASEAN to reduce its reliance on Chinese supply chains. However, Washington’s tariff strategy, designed to create distance between ASEAN and China, faces a formidable obstacle: The regional supply chains are already too deeply entrenched, complex, and economically vital to be easily dismantled.
ASEAN carefully and successfully balanced its relationships with both powers. It strengthened economic ties with China to maintain a key market and source of imports, while simultaneously deepening cooperation with the United States to diversify its economic and security partnerships. This highlights ASEAN’s growing influence in a multipolar world
The US outreach was swiftly countered by China. The day after the US-ASEAN meetings, Chinese Premier Li Qiang attended the signing ceremony for the upgraded China-ASEAN Free Trade Area (CAFTA) 3.0. This agreement marks the latest evolution of a longstanding economic partnership, building on CAFTA 1.0, which was signed in 2002 and took effect in 2010, and its 2015 upgrade (version 2.0), which enhanced rules of origin and trade facilitation. The newly signed version 3.0 comprehensively elevates the level of openness, incorporating modern areas of cooperation such as supply chain connectivity, the digital economy, and green industries.
The results of this deepening integration are clear. Bilateral trade between China and ASEAN has surged from $235.5 billion in 2010 to $982.3 billion last year, representing a four-fold increase. Since the agreement’s inception in 2002, trade has grown an impressive seventeen-fold. This volume solidifies a robust trading relationship: China has been ASEAN’s largest trading partner for 16 consecutive years, and ASEAN has been China’s largest partner for five. While the US remains a vital partner as ASEAN’s second-largest trading partner and a leading source of foreign direct investment, the scale of the China-ASEAN trade relationship is in a league of its own.
The bloc actively pursues cooperation and investment with the US in artificial intelligence and advanced manufacturing. Yet it remains inextricably linked to China in critical areas such as supply chains, trade, and infrastructure investment. This balanced approach allows ASEAN to navigate effortlessly between the competing economic spheres of the two superpowers.
In stark contrast to ASEAN’s deft navigation, the European Union finds itself in a far more awkward and constrained position. During the onset of the tariff war, China offered EU trade concessions to strengthen economic ties in exchange for Brussels’ maintaining neutrality in the Sino-US rivalry. However, this outreach was thwarted by the EU’s profound dissatisfaction on two key fronts: its persistent and high trade deficit with China, and fundamental disagreements over China’s “stance” on the Russia-Ukraine conflict.
This lack of trust was starkly evident at the 25th China-EU Summit in July, which coincided with what should have been a celebratory 50th anniversary of diplomatic relations. Instead of a grand commemoration, the event was marked by discord. A planned two-day meeting in Brussels was condensed to a single day after China insisted on hosting it in Beijing. This diplomatic friction serves as a clear indicator of the deep-seated distrust that currently prevents meaningful cooperation.
The eruption of the tariff war led many, including me, to advocate for a strengthened multipolar world. The vision was to deepen economic ties with pivotal powers like the EU and ASEAN, creating a more balanced global order, and steering globalization onto a more stable course. However, not only has the hope for improved China-EU relations gone unfulfilled, but Brussels, by following the US’ steps in successive tariff, trade, and tech wars, has compromised its own strategic autonomy. In choosing to align so closely with one pole, the EU has inadvertently diminished its own influence and postponed the multipolar future it hopes to seek.
The Netherlands government’s recent actions exemplify the extreme lengths to which the EU will go to block China in strategic sectors like semiconductors. Citing national security, it forcibly removed Zhang Xuezheng, the Chinese CEO of Nexperia, a Netherlands subsidiary of China’s Wingtech. This move, however, backfired, revealing the pitfalls of aligning too closely with US policy shifts.
The incident was triggered by the US adding Wingtech to its Entity List. Yet, following the Sino-US summit, Washington deescalated these very sanctions, leaving the Netherlands government isolated. China responded not with silence, but with a potent countermeasure: banning exports from Nexperia’s factory in Dongguan. This disrupted global supply chains, particularly hitting the European automotive industry. Although China has since offered an olive branch by granting exemptions to some affected companies, the Netherlands government remains stubbornly committed to its takeover of Nexperia.
Thus, while the US and China have moved to reduce tensions, the Netherlands government remains caught in a war of words of its own making, struggling to find a face-saving exit from a predicament that underscores the cost of its diminished strategic autonomy.
The ongoing saga offers a powerful lesson in geopolitical strategy. The contrast offers a stark lesson. In the great power contest, ASEAN has mastered the art of balance to find its sweet spot. The EU, by siding decisively, has been left with only a bitter aftertaste.
The author is a professor of globalization and business at the City University of Hong Kong.
The views do not necessarily reflect those of China Daily.
